Personalized online news is as old as the web itself. But personalized online video news is a nut that has yet to be fully cracked - although by all rights it should be. This was Redlasso's goal, until broadcasters, which hadn't given permission for their content to be ingested and shared, put an end to the young company last month.
Now comes 1Cast, a company seeking to be a legitimate Redlasso successor. Today it is announcing first round funding from wireless king Craig McCaw's Eagle River Holdings. Yesterday I got more details from 1Cast CEO Anthony Bontrager.
Anthony has correctly realized that gaining deals with video news partners is an absolute prerequisite to success. To that end he says the company will have "no shortage" of content, and also has a particular focus on "repatriating international content." Though for now he's not disclosing any details, based on conversations I've had with broadcasters, my sense is that credible companies, even when early stage, can get deals done.
Yet there are other key success factors for a personalized news aggregator like 1Cast to succeed. Three that are high on my list are user experience, audience growth and revenue generation. Miss on any of these three and I think the model fails.
From a user experience standpoint, Anthony says creating a new personalized "micro-cast" is a simple three step process. That sounds promising, though since the beta won't open till later month (with full launch late in '08), I can't judge the specifics yet. And the wildcard is how content providers will ultimately react to having their videos mashed together with competitors' videos in a single micro-cast.
Growing an audience is a more daunting. As we all know, the web is incredibly noisy, and users have well-entrenched news-gathering habits. Yet there is white space in personalized video news. Anthony said that while 1Cast will be a central hub, he's focused on "channel partners" as well, and portals in particular, to grow traffic. Deals with majors like Yahoo, AOL, MSN, and others would be a huge win, but are notoriously hard to clinch for startups.
Last, but not least is revenue. Even assuming an audience can be built, optimally monetizing it is a challenge. Anthony said they're working with an undisclosed ad network and will also build their own sales team. Direct sales are important as living primarily off an ad network's splits will not produce sufficient revenue for 1Cast.
Yet even a direct sales team isn't a panacea; Anthony mentioned that some content providers want to sell any new impressions 1Cast generates. That's consistent with how I understand other Syndicated Video Economy deals like these work as well. But like other aggregators, that leaves 1Cast with a swiss cheese inventory situation that is complex to sell. Then factor in that some inventory will be essentially local in nature (i.e. generated from local video news) - which really requires a local sales orientation to fully monetize - and complexity grows still further.
Add it all up and 1Cast has a tall mountain to climb to succeed. Not insurmountable, but definitely challenging. From a consumer standpoint, personalized video news is very compelling; I just wonder whether a 6-person startup has the necessary mojo or if it requires a larger player with deep resources and content relationships. Meanwhile broadcasters are pursuing their own video initiatives and others like Voxant, WorldNow and Critical Media have been circling these waters for a while. 1Cast has an ambitious story; how it unfolds will be worth watching.
What do you think? Post a comment!